Mahindra and Mahindra on July 10 clarified that there was no linkage between the recently announced price reduction of its popular SUV XUV 700 and Uttar Pradesh government's hybrid vehicle policy.
In a regulatory filing, M&M said, "We wish to inform the stock exchanges that there is no linkage between the price cut on certain XUV700 variants and UP EV/hybrid policy as reported by some media."
The announced price cut of XUV700 is a continuation of our business strategy execution that was articulated in our 14th February 2024 analyst meeting where we clearly outlined that “we have to bring the average price point down to drive growth," M&M further added.
Mahindra & Mahindra said its XUV700's fully-loaded AX7 range now starts at Rs 19.49 lakh, a price cut of over Rs 2 lakh. The price cut will enable more people to experience the range, it added.
"We kickstarted this effort with the launch of AX5 select variant in May 2024 and have also brought in a 3rd anniversary celebration variant for the higher-end XUV700 for a limited period of 4 months."
The company has clarified that these are 'well deliberated' actions which were incorporated in its business plan based on the material cost savings it realised earlier.
Shares of M&M were trading with deep cuts of around 7 per cent as of 2:15 pm IST, while benchmark indices were down 0.8 per cent.
Meanwhile, to promote the use of environment-friendly vehicles in the State, the Uttar Pradesh (UP) government recently announced a complete waiver of registration tax on strong hybrid cars. The move is likely to benefit companies like Maruti Suzuki India (MSIL), Honda Cars India (HCIL) and Toyota Kirloskar Motor (TKM) wherein customers can benefit up to Rs 3.50 lakh.
The UP government charges 8 percent road tax on vehicles which cost less than Rs 10 lakh, and 10 percent on vehicles costing more than Rs 10 lakh (on ex-showroom).
According to FADA, UP is one of the largest markets for passenger vehicles in the country, with retail sales of 2,36,097 units in the first half (H1) of this year — a jump of 13.46 per cent compared with 2,08,092 units in January-June 2023.
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